The Ministry of Food Processing Industries (MoFPI) in India introduced the centrally sponsored PM Formalisation of Micro Food Processing Enterprises Scheme (PMFME). This scheme is a component of the Atmanirbhar Bharat Abhiyan – Vocal for Local Initiative in the food processing sector and aims to provide micro food processing enterprises with financial, technical, and business support.
PMFME Scheme: An Overview
The PMFME scheme is a strategic endeavor targeted at bolstering the competitiveness of individual micro-enterprises in the unstructured segment of India’s food processing industry. The plan also aims to promote formalization in the sector. The scheme is set to operate over five years (2020-21 to 2024-25) with a financial allocation of Rs. 10,000 Crore.
The Scheme’s Focus Areas
The PMFME scheme adopts the concept of One District One Product (ODOP) to benefit from scale economies in input procurement, availing common services, and product marketing. Other areas that the scheme focuses on include Waste to wealth products, minor forest products, and Aspirational Districts.
Support Under the PMFME Scheme
Under the PMFME scheme, Individual or Group Category Micro Enterprises can avail credit-linked capital subsidy of 35% of the eligible project cost, capped at Rs.10 lakh per unit. Self-Help Groups (SHGs) can receive seed capital up to Rs. 40,000/- per member engaged in food processing. This support is for working capital and purchase of small tools, subject to a maximum of Rs. 4 lakh per SHG. Furthermore, the scheme provides a credit-linked capital subsidy of 35%, with a ceiling of Rs. 3 crore, to support FPOs, SHGs, Cooperatives, and any Government agency in establishing common infrastructure.
Capacity Building Under the PMFME Scheme
The PMFME scheme also pays attention to capacity building. The plan encompasses training for Entrepreneurship Development Skilling (EDP+), a program tailored to meet the needs of the food processing industry and product-specific skilling. District Resource Persons (DRPs) are available to offer handholding support to micro food processing enterprises for complying with FSSAI and other statutory requirements.
Status of the Food Processing Industry in India
Food processing is a manufacturing process that transforms raw materials into intermediate foods or edible items using scientific knowledge and technology. The sector has grown at an average annual rate of around 8.3% over the last five years. As per recent data, it employs 12.2% of persons in the registered manufacturing sector and contributes about 10.9 % of India’s total exports.
Challenges in the Indian Food Processing Industry
Despite its significant role, the food processing industry faces several challenges, including lack of infrastructure, such as cold storage and transport facilities, limited access to finance, and issues related to quality control and hygiene standards.
Government Initiatives for the Food Processing Sector
To boost the sector, the government approved 100% Foreign Direct Investment (FDI) under automatic route for the food processing sector. A Special Food Processing Fund of Rs. 2000 crore was instituted with the National Bank for Agriculture and Rural Development (NABARD) to provide affordable credit for Mega Food Parks (MFP) and processing units within these parks. In 2019, the fund’s coverage was widened to include setting up of Agro-Processing Clusters along with individual manufacturing units.
